China’s stock market jumps after government policies

China’s stock market surged and had its best day since 2008 after Beijing introduced new policies to boost its slowing economy and revitalize the struggling market. The blue-chip CSI 300 index jumped 8.48% on Monday, reaching its biggest rise in over a year.

The CSI 300 Index tracks the performance of the top 300 companies listed on the Shanghai and Shenzhen stock exchanges in China.

Traders traded a record $372 billion worth of stock on the Chinese stock market.

Over the last week, the CSI 300 saw its best weekly performance in nearly 16 years. It rose over 8% and saw a five-day gain of 25%. The Shanghai Composite Index also erased year-to-date losses.

These gains were driven by a range of policies, including support for the property market and clear instructions to stabilize stock prices. 

Investors responded with large inflows, pushing both Chinese and Hong Kong shares to their highest levels in years. However, some market analysts caution that while the rally is promising, uncertainty remains about its sustainability.

Despite the gains, the CSI 300 remains 30% lower than its peak in 2021, facing issues like a struggling property market and slowing growth.

In contrast, US markets have been strong this year, largely due to interest in technology and stable inflation. The S&P 500 has hit over 40 record highs and is currently trading at 25 times earnings, about twice as high as its Chinese counterpart.

Experts believe that US stock gains might slow down until after the presidential election, leading some investors to explore cheaper options like Chinese exchange-traded funds (ETFs).